Scale Computing Aims to Prove Its Technology, From Way East of Silicon Valley

Scale Computing has shown it can raise money from brand-name venture firms in Silicon Valley, but in its latest fund-raising effort the storage start-up turned to Heron Capital Venture Fund, a Midwestern venture fund that specializes in life sciences.

That new capital helps Jeff Ready, one Scale’s five founders and its chief executive, to support both his mission to build a big technology company and to prove you can do that across the country.

Scale Computing

Jeff Ready, chief executive and one of the founders of Scale Computing.

“Part of Scale is the concept of improving the data center and part of Scale is showing that a big technology company can be built somewhere other than Palo Alto,” Ready said. “I know it can be done and there are a lot of people that doubt that.”

Ready’s first encounter with those doubters came in the 1990s when the first company he helped found, Radiate, had trouble getting funding without moving to Boston or California. It eventually took the money and the move to Mountain View, Calif., that came with it.

“The only reason we had to move the company was to get the funding, not because we couldn’t find the people,” said Ready, who was born and raised in Indiana. He also attended Rose-Hulman Institute of Technology in Terre Haute.

Indianapolis may not be the tech Mecca that Silicon Valley is, but it’s not without its success stories. Email marketing firm ExactTarget went public earlier this year and now has a market capitalization of about $1.55 billion. Angie’s List, which runs a website for finding local services, went public late last year and in 2010 data warehouse company Teradata paid $525 million for Aprimo, a local marketing software company.

Heron Capital is not the first local fund that Scale Computing brought into its syndicate. CID Capital and Spring Mill Venture Partners, both based in metropolitan Indianapolis, participated in its first round in 2009, which was led by Blue Chip Venture Co. in nearby Columbus, Ohio. Benchmark Capital and Scale Venture Partners, both in based in Silicon Valley, led its next two rounds. Reservoir Venture Partners, another Columbus-based firm, also participated in the most recent round.

If Scale Computing can help contribute to the success of those funds, that will mean more funding for future entrepreneurs will flow into the area, Ready said.

It’s not entirely idealism that motivates him and the team at Scale Computing to build in Indianapolis. There are significant business advantages–most notably lower costs–to building a business there, rather than on the coasts, he said. And the company’s not avoiding the West Coast–it has an office in San Mateo, Calif.

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